RHODE ISLAND TURNPIKE AND BRIDGE AUTHORITY (A … Reports/Audit 2018.pdfand Town of Jamestown, and...

RHODE ISLAND TURNPIKE AND BRIDGE AUTHORITY (A COMPONENT UNIT OF THE STATE OF RHODE ISLAND)

BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2018


CONTENTS

INTRODUCTORY SECTION:

Letter of Transmittal .............................................................................................................. 1-3 FINANCIAL SECTION: Independent Auditors’ Report.................................................................................................. 4-6 Management’s Discussion and Analysis ................................................................................ 7-14 Financial Statements

Statement of Net Position .................................................................................................. 15-16 Statement of Revenues, Expenses and Changes in Net Position .............................................17 Statement of Cash Flows ................................................................................................... 18-19

Notes to Financial Statements ............................................................................................... 20-35 Supplementary Information

Schedule of Travel and Entertainment Expenses ............................................................... 36-37 State of Rhode Island Required Format

Attachment B - Statement of Net Position ........................................................................ 38-39 Attachment C - Statement of Changes in Net Position ............................................................40 Attachment D – Long-Term Debt ............................................................................................41 Attachment E - Schedule of Changes in Long-Term Debt ....................................................421

STATISTICAL SECTION:

Schedule of Traffic Count and Revenues ................................................................................43 Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ...................................... 44-45

4

INDEPENDENT AUDITORS’ REPORT Board of Directors Rhode Island Turnpike and Bridge Authority Report on the Financial Statements We have audited the accompanying financial statements of the Rhode Island Turnpike and Bridge Authority (the Authority), a component unit of the State of Rhode Island, as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Rhode Island Turnpike and Bridge Authority, a component unit of the State of Rhode Island, as of June 30, 2018, and the changes in its financial position and its cash flows for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis on pages 7 through 14 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Rhode Island Turnpike and Bridge Authority, a component unit of the State of Rhode Island, taken as a whole. The accompanying supplementary information of the schedule of travel and entertainment expenses, and Attachments B, C, D, and E (State of Rhode Island format), for the year ended June 30, 2018, on pages 36 through 42, is presented for purposes of additional analysis and is not a required part of the financial statements. The information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information above is fairly stated in all material respects in relation to the basic financial statements as a whole.

6

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 25, 2018 on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control over financial reporting and compliance.

Providence, RI September 25, 2018

7

MANAGEMENT’S DISCUSSION AND ANALYSIS

The Rhode Island Turnpike and Bridge Authority (the Authority) is a quasi-public agency created by the Rhode Island General Assembly in 1954 to maintain and operate the Claiborne Pell Bridge (Pell Bridge), on the west shore of Narragansett Bay (the Bay) which connects the City of Newport and Town of Jamestown, and the Mount Hope Bridge, on the east shore of the Bay which connects the Towns of Bristol and Portsmouth, Rhode Island. For over 50 years, the Authority has been committed to maintaining and operating the Pell and Mount Hope Bridges in a fiscally responsible manner that ensures their physical integrity and longevity. In June of 2012, the Jamestown Verrazano Bridge and the new Sakonnet River Bridge were turned over to the Authority by the state legislature for the operation and maintenance of the bridge structures and associated parcels of land. Day-to-day operations of the Authority are led by an Executive Director who oversees 100 employees and reports to a five-member Board of Directors (Board) comprised of the Director of Transportation, who is a member ex-officio, and four members appointed by the Governor. This discussion and analysis of the Authority’s financial position and performance provides information as of June 30, 2018 and for the year then ended, with comparison as deemed appropriate to the previous fiscal year ended June 30, 2017. Readers are encouraged to utilize this document in conjunction with their review of the Authority’s financial statements. OVERVIEW OF FINANCIAL STATEMENTS The Authority is a component unit of the State of Rhode Island for financial reporting purposes and as such, the annual audited financial statements of the Authority are included in the State’s Annual Financial Report and are classified as an enterprise fund. The Authority’s annual financial statements consist of three parts: management’s discussion and analysis, the basic financial statements with note disclosures, and supplementary information. The basic financial statements report information about the self-supporting activities of the Authority funded primarily by toll revenue. They consist of a Statement of Net Position; a Statement of Revenues, Expenses and Changes in Net Position; and a Statement of Cash Flows, all of which are supported by Notes to the Financial Statements.

8

MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) OVERVIEW OF FINANCIAL STATEMENTS (Continued) The Authority follows accounting principles generally accepted in the United States of America as promulgated by the Governmental Accounting Standards Board (GASB). The financial statements provide indications of the Authority’s financial health. The Statement of Net Position summarizes all of the Authority’s assets, deferred outflows of resources, liabilities and deferred inflows of resources (on the accrual basis of accounting) as of the fiscal year-end date, and indicates which assets can be used for general purposes and which are restricted by bond covenants as to their use. The Statement of Revenues, Expenses and Changes in Net Position reports revenues earned and expenses incurred during a fiscal year. The Authority uses the economic resources measurement focus and accrual basis of accounting. All assets and liabilities, and changes in net position, are reported as soon as the underlying event giving rise to the asset or liability and resulting change in net position occurs, regardless of the timing of when the cash is received or paid. In addition to reporting cash provided and used by operating activities, the Statement of Cash Flows also reports other cash sources, such as investment income, and other cash uses, such as the purchase of capital additions and the repayment of bond principal and interest obligations. In order to ensure observance of limitations and restrictions placed on the use of resources available to the Authority, its accounts are classified, for internal accounting purposes, into a number of separate funds.

FINANCIAL STATEMENTS AND OPERATIONAL SUMMARIES

Activity and Year-End Financial Position

The Authority’s total net position increased in 2018 by $3.5 million, or 2.9%, due to operating activity during the year. Capital assets, net of depreciation, increased by $11.2 million and were principally funded by proceeds from bonds payable and were part of the Authority’s ongoing capital improvement program (CIP). A comparative summary of the Authority’s net position is shown below (dollars in thousands):

9

MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)

FINANCIAL STATEMENTS AND OPERATIONAL SUMMARIES (CONTINUED)

Activity and Year-End Financial Position (Continued)

Statements of Net Position

Assets:Capital assets (net) $ 214,031 67.7% $ 202,780 63.4%

Other assets:Investments 76,935 24.3% 87,769 27.5%Cash and cash equivalents 22,473 7.1% 26,855 8.4%Other 2,816 0.9% 2,227 0.7%

Total other assets 102,224 32.3% 116,851 36.6%

Total assets 316,255 100.0% 319,631 100.0%

Liabilities:Noncurrent, bonds payable 177,118 56.0% 183,652 57.5%Other liabilities 13,335 4.2% 13,607 4.3%

Total liabilities 190,453 60.2% 197,259 61.7%

Deferred inflows of resources 0 0.0% 6 0.0%

Net position:Net investment in capital assets 52,945 16.7% 62,843 19.7%Restricted, bond covenants 70,590 22.3% 53,750 16.8%Unrestricted 2,267 0.8% 5,773 1.8%

Total net position $ 125,802 39.8% $ 122,366 38.3%

June 30, 2018 June 30, 2017

10

MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)

Statements of Revenues, Expenses and Changes in Net Position

Operating results are discussed in the Operating Results section below. A condensed summary of activity follows (dollars in thousands):

Operating revenues:Toll revenues $ 20,539 55.7% $ 20,728 55.9%Gas tax revenue 15,714 42.7% 15,438 41.7%Grant revenue 22 0.1% 257 0.7%

Transponder revenues 488 1.3% 550 1.5%Statement and bank fees 79 0.2% 85 0.2%

Total operating revenues 36,842 100.0% 37,058 100.0%

Operating expenses:Personnel services 5,467 14.8% 4,879 13.2%Insurance 1,042 2.8% 1,169 3.2%Repairs and maintenance 741 2.0% 470 1.3%Other 5,617 15.2% 4,450 12.0%Transponder expense 223 0.6% 173 0.5%Depreciation 14,123 38.3% 13,634 36.8%

Total operating expenses 27,213 73.7% 24,775 67.0%

Operating income (loss) 9,629 26.1% 12,283 33.1%

Nonoperating expenses, net (6,193) -16.8% (6,675) -18.0%

Change in net position 3,436 9.3% 5,608 15.1%

Net position, beginning of year 122,366 116,758

Transfer -- --

Net position, end of year $ 125,802 $ 122,366

2018 2017

11

MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) The Authority had a decrease in toll revenues for the year ended June 30, 2018 (FY2018) of approximately $189,000 which was principally due to a decrease in traffic related to lane closures which occurred during a major renovation project on the Claiborne Pell Bridge. Personnel related expense increases were principally due to increased staffing. Increases in other operating expenses were principally due to expenses related to environmental remediation expenses at the Mt. Hope and Claiborne Pell bridges which totaled approximately $1,700,000. The Authority continually monitors both staffing in the customer service center and the lanes in the toll plaza to ensure the proper level of staff to service its customers.

Operating Results

Pell Bridge Traffic and Revenue Summary

Traffic and revenue statistics are as follows:

Traffic (number of passengers)Vehicle fares paid with ETC 9,423,123 87% 9,455,279 86.8% Vehicle fares paid with cash 1,350,187 13% 1,440,491 13.2%

10,773,310 100.0% 10,895,770 100.0%

Revenue (not including violations)Vehicle fares paid with ETC $ 13,942,581 71.8% $ 13,517,619 69.8% Vehicle fares paid with cash 5,469,580 28.2% 5,856,226 30.2%

$ 19,412,161 100.0% $ 19,373,845 100.0%

2018 2017

2018 2017

Traffic and Revenue fares paid by cash decreased from the prior year while fares paid by ETC increased. Overall, Pell Bridge traffic decreased during 2018 compared to the previous year, resulting in a slight decrease in revenue.

12

MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) Engineering and Maintenance The head of the engineering department is a Director of Engineering who oversees all capital construction activities on behalf of the Authority. In addition, under the Director of Engineering, separate consulting engineering firms, including on-call contracting firms, have been engaged to manage projects undertaken on each structure. Each bridge is subject to an annual inspection, and a more thorough and complete “in-depth” inspection is performed on each structure every two years. The Authority’s Board (Board) hired a nationally recognized firm to conduct a risk management study to evaluate the Authority’s procedures to avoid, prepare for and respond to natural and manmade concerns. The firm made recommendations to improve the safety and security of the bridges. The Authority has begun implementing these recommendations. At June 30, 2018, 67.7 % of the Authority’s assets are capital assets, most notably the two largest suspension bridges in New England, the operation and maintenance of which the Authority has been charged. In order to continue to protect these assets for the foreseeable future, the Board bi-annually revises its ten-year Renewal and Replacement Plan. In June 2016, the Board approved an updated 10-year Capital Improvement Plan (CIP). During FY2018, the Authority continued its preventive maintenance programs for both the Claiborne Pell and Mount Hope Bridges, which are designed to ensure the safety, security, and aesthetics of the structures while generating long-term savings for the Authority. As part of this effort, a number of Authority staff have been assigned additional duties, including preventive maintenance of bridge bearings; repair of potholes on approach roads; preventive corrosion treatment on bridges; snow removal at the toll plaza; lawn maintenance, routine inspection on expansion and contraction components of bridges; painting of bridge rails and building interiors; and signage maintenance on bridges. Capital and Construction Activities Under the CIP, the Board has approved $223 million towards various bridge and road projects.

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 Total (in $1,000's)

Newport Pell Bridge 22,498$ 6,824$ 5,925$ 15,223$ 21,253$ 16,282$ 1,415$ 1,855$ 12,325$ 12,435$ 116,035$

Mount Hope Bridge 10,633 7,507 505 828 3,202 1,739 12,316 1,207 4,850 9,027 51,814

Sakonnet River Bridge 4,123 287 437 576 2,454 2,630 1,813 649 597 499 14,065

Jamestown - Verrazzano Bridge 1,304 6,280 2,201 7,104 1,789 2,684 802 2,814 500 1,150 26,628

RI 138 Connector Highway 374 3,196 691 249 143 152 454 1,149 276 285 6,969

Facilities - Capital Projects 313 1,381 1,183 21 635 21 378 3,875 21 78 7,906

39,245$ 25,475$ 10,942$ 24,001$ 29,476$ 23,508$ 17,178$ 11,549$ 18,569$ 23,474$ 223,417$

13

MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) Capital and Construction Activities (Continued) The detail of the activity that happened from July 1, 2017 to June 30, 2018 in capital activities is presented in note 3 on page 29 of the notes to the financial statements. Finance and Accounting Finance and accounting functions are headed by a Chief Financial Officer who is responsible for maintaining the Authority’s books and records and for adhering to covenants and other requirements of agreements entered into with bondholders. Debt Service At June 30, 2018, the Authority’s debt service consists of bond obligations entered into during 2003, 2010 and 2016. The 2003 Series A bond issuance raised $35,765,000. Principal payments were due annually, and interest payments semiannually, until maturity which occurred in December 2017 (FY2018). The 2010 Series A Revenue bonds were sold by the Authority in the amount of $50,000,000, and mature in 2039. Principal payments have been deferred until December 2018. In February 2016, with the approval of the State of Rhode Island, the Authority issued 2016 Series A Motor Fuel Tax Revenue Bond in the amount of $117,590,000. The 2016 Bond sold at a premium of $16,333,064 with total proceeds of $133,923,064 of which $60,000,000 paid off a $60,000,000 Bond Anticipation Note (BAN) entered into in February 2014. The remaining proceeds will fund the updated CIP. Principal payments are due annually, and interest payments semiannually, until maturity in 2040. Principal payments on the 2016 Motor Fuel Tax Revenue Bond Series A bonds during 2018 totaled $2,765,000. In accordance with the trust agreement entered into between the Authority and BNY Mellon, the trustee, debt service obligations (monthly deposits of toll revenues made into separate principal, interest, and debt service reserve accounts held by the trustee) were made during FY2018 on a timely basis. Compliance with restrictions and covenants stipulated in the trust agreement is monitored during the year by the Authority. Bonded debt as of June 30, 2018 and 2017 totaled $163,020,000 and $168,940,000, respectively. Investments The Authority’s investments comprise 24.3 % and 27.5% of assets at June 30, 2018 and 2017, respectively. Under the trust agreement referenced above, “money in all funds and accounts shall be invested by the holder of such Fund or Account as soon as practicable upon receipt in Permitted Investments.” The definition of Permitted Investments includes mostly highly-rated fixed-income securities. At June 30, 2018, 85.5% of the Authority’s investments are in the form of money market mutual funds; U.S. Treasury obligations represent approximately 4.6%. Approximately 5.8% of the Authority’s investments are in corporate bonds.

14

MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) Union Contract The Authority entered into a three-year contract with the union, effective July 1, 2017. The current contract expires June 30, 2020. Insurance Cost-Saving Initiatives The Authority maintains property and casualty insurance coverage as deemed appropriate in consultation with an insurance industry expert. In fiscal year 2008, in order to contain the cost of insuring the bridges, the Board increased the deductible on the marine insurance on the bridges. In FY2018, the Authority competitively bid the commercial insurance policies. The result was significant savings on the property coverage for the bridges beginning August 1, 2018. The Board continues to work to find ways to decrease insurance costs. Legislative Developments The FY2013 State budget included an article that authorized the transfer of the Sakonnet River and Jamestown/Verrazano Bridges to the Rhode Island Turnpike and Bridge Authority from the Rhode Island Department of Transportation. The Authority assumed care, custody and control of these new assets in April 2013; however, ownership and title to the bridges and related property remain with the State. Tolls commenced in August 2013 (FY2014) through General Assembly action taken in the FY2015 State budget. Subsequently, the Rhode Island General Assembly passed the FY2015 State budget, which eliminated the toll on the Sakonnet River Bridge, raised the gas tax and other fees, earmarking $0.035 of the gas tax to the Authority to fund the additional maintenance costs associated with the addition of the Sakonnet River and Jamestown Verrazano Bridges. Legislation passed in June 2016 for FY2017 continues the gas tax at $0.035 per gallon. The annual estimated revenue expected from the gas tax in FY 2019 is approximately $15.5 million. The Authority was selected by the Department of Transportation to provide back office functions for the Road Works truck tolling initiative that commenced June 11, 2018. Requests for Information This financial report is designed to provide a general overview of the Authority and its finances. Questions about any of the information contained in this report and requests for additional information may be addressed to the Executive Director at: Rhode Island Turnpike and Bridge Authority, P.O. Box 437, Jamestown, RI 02835.


STATEMENT OF NET POSITION

JUNE 30, 2018

The accompanying notes are an integral part of these financial statements. 15

ASSETS:Current assets:

Cash and cash equivalents 11,929,466$ Accrued interest receivable 73,450 Accounts receivable 381,801 Prepaid expenses 124,974 Inventory 35,869

Restricted:Cash and cash equivalents 10,543,854 Investments 60,585,087 Accounts receivable 2,199,673

Total current assets 85,874,174

Noncurrent assets:Investments 16,349,848 Capital assets not being depreciated 1,729,390 Capital assets being depreciated, net 212,301,270

Total noncurrent assets 230,380,508

Total assets 316,254,682


STATEMENT OF NET POSITION (CONTINUED)

JUNE 30, 2018


LIABILITIES:Current liabilities:

Accounts payable 1,978,208 Accrued interest payable 1,496,300 Accrued expenses 4,803,277 Electronic toll liability 5,057,353 Current portion of bonds payable 4,225,000

Total current liabilities 17,560,138

Bonds payable, less current portion 172,892,792

Total liabilities 190,452,930

NET POSITION:Net investment in capital assets 52,945,077 Restricted, bond covenants 70,589,736 Unrestricted (deficit) 2,266,939

Total net position 125,801,752$


STATEMENT OF REVENUES, EXPENSES AND CHANGE IN NET POSITION



Operating revenues:Tolls, including violation fees 20,539,004$ Transponder sales 487,703 Gas tax revenue 15,713,927 Grant revenue 22,500 Other fees 78,700

Total operating revenues 36,841,834

Operating expenses:Personnel services 5,467,132 Utilities 191,134 Contractual services 1,687,476 Other supplies and expenses 2,733,820 Insurance 1,041,570 Repairs and maintenance 741,171 Transponder expense 223,412 Bridge Inspections 1,004,255 Depreciation 14,123,226

Total operating expenses 27,213,196

Operating income 9,628,638

Nonoperating revenues (expenses):Interest expense (7,698,006) Amortization of bond premium 655,509 Amortization of bond discount (39,614) Investment income, net of trustee fees 756,277 Gain/loss on casualty disposal 14,401 Miscellaneous income 118,074

Total nonoperating revenues (expenses) (6,193,359)

Change in net position 3,435,279

Net Position - Beginning of Year 122,366,473

Net Position - End of Year 125,801,752$


STATEMENT OF CASH FLOWS



Cash flows from operating activities:Cash received from:

Tolls 20,548,409$ Transponder sales 487,703 Gas tax revenue 15,725,446 Grants 22,500 Other 78,700

Cash payments to:Suppliers for goods and services (7,385,976) Employees for services (4,887,656)

Net cash provided by operating activities 24,589,126

Cash flows from capital and related financing activities:Acquisition and construction of capital assets (26,897,078) Principal paid on bonds (5,920,000) Interest paid on bonds (7,724,430)

Net cash used in capital and related financing activities (40,541,508)

Cash flows from investing activities:Proceeds from sales and maturities of investments 79,209,825 Purchases of investments (68,375,860) Investment income received 736,408

Net cash provided by investing activities 11,570,373

Net decrease in cash and cash equivalents (4,382,009)

Cash and cash equivalents, beginning of year 26,855,329

Cash and cash equivalents, end of year 22,473,320$


STATEMENT OF CASH FLOWS (CONTINUED)



Reconciliation of operating income to net cash provided by operating activities:Operating income 9,628,638$ Adjustments to reconcile operating income to net cash provided by

operating activities:Depreciation 14,123,226 Miscellaneous income 118,075 Changes in assets and liabilities:

Accounts receivable (554,662) Inventory 17,665 Prepaid expenses (32,060) Accounts payable 353,540 Accrued expenses 579,476 Electronic toll liability 355,228

Net cash provided by operating activities 24,589,126$


NOTES TO FINANCIAL STATEMENTS


20

NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

The Rhode Island Turnpike and Bridge Authority (the Authority) was created in 1954 by the Rhode Island General Assembly as a body corporate and politic, with powers to construct, acquire, maintain, and operate bridge projects as defined by law. The Authority was responsible for the construction of the Claiborne Pell Bridge (formerly the Newport Bridge), which was opened for traffic on June 28, 1969, and has been responsible for the operation and maintenance of the Mount Hope Bridge between Bristol, Rhode Island and Portsmouth, Rhode Island and the Claiborne Pell Bridge between Newport, Rhode Island and Jamestown, Rhode Island since 1964 and 1969, respectively. On April 25, 2013, the State of Rhode Island (the State) transferred custody, control and supervision of the land and improvements for the Jamestown and the Sakonnet River Bridges from the Rhode Island Department of Transportation (RIDOT) to the Authority. Ownership and title of the bridges remains with the State and the Authority is responsible for the improvements. The Claiborne Pell Bridge, Mount Hope Bridge, Jamestown Verrazano Bridge and Sakonnet River Bridge are collectively referred to herein as the bridges.

The Authority is a component unit of the State for financial reporting purposes and, as such, the financial statements of the Authority will be included in the State’s Annual Financial Report. These financial statements present only RITBA and not the financial position, operating results, or cash flows of the State of Rhode Island.

The Authority is exempt from federal and state income taxes.

FINANCIAL STATEMENT PRESENTATION, MEASUREMENT FOCUS AND BASIS OF ACCOUNTING

The Authority engages only in business-type activities, which are activities that are financed in whole or in part by fees charged to external parties. Accounts of the Authority are maintained in compliance with the provisions of the Master Indenture of Trust (the Trust Agreement) entered into with the Trustee of the bonds. The Trust Agreement secures the Authority’s revenue bonds and requires that the accounting policies of the Authority conform to accounting principles generally accepted in the United States of America as applied to governmental entities.

The financial statements of the Authority have been prepared using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, all assets and liabilities, and deferred inflows and outflows of resources associated with operations are included on the statement of net position, revenues are recorded when earned, and expenses are recorded at the time the liabilities are incurred, regardless of the timing of the related cash flows.




21

NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

FINANCIAL STATEMENT PRESENTATION, MEASUREMENT FOCUS AND BASIS OF ACCOUNTING (CONTINUED)

A Memorandum of Understanding (MOA) exists between the Authority and the Rhode Island Department of Transportation (RIDOT). Under the terms of the MOA, the Authority is to provide E-Z Pass and Video transaction processing support for the Rhode Works Toll Facilities Project which is implemented and administered by RIDOT. Costs incurred by the Authority associated with the implementation and operation of this support are fully reimbursed by RIDOT. Processing of these transactions began on June 11, 2018. DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES

Deferred outflows of resources represent the consumption of net assets that is applicable to a future reporting period. Deferred inflows of resources represent the acquisition of net assets that is applicable to a future reporting period. The Authority had no deferred outflows of resources at June 30, 2018. The Authority’s deferred inflows of resources at June 30, 2018 consist of deferred gain on advance debt refunding, determined as the difference between the reacquisition price and net carrying amount of the refunded debt. The deferred gain is being amortized over the life of the 2003 bond (14-1/2 years) as of June 30, 2018; amortization is reported as a reduction of interest expense. There are no deferred inflows of resources at June 30, 2018. USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.




22


OPERATING AND NON-OPERATING REVENUES AND EXPENSES

Operating revenues and expenses result from providing services for the ongoing operations of the bridges. The principal operating revenue of the Authority is the collection of toll revenue from the users of the Claiborne Pell Bridge. Operating expenses include all expenses for the ongoing management and maintenance of the bridges. Non-operating revenues and expenses include all items that do not meet the definition of operating revenues and expenses. CASH AND CASH EQUIVALENTS

Authority considers all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents.

INVESTMENTS

Investments are recorded at fair value using Level 1 inputs, except for money market funds, which are used as temporary cash management investments. The fair value of these money market funds reflects the net asset value reported by the fund administrator which is a stable $1 per unit. Money market investments have no withdrawal limitations and a remaining maturity at the time of purchase of one year or less. The underlying investments which are short-term cash equivalent type investments (for example, U.S. Treasury and agency obligations) are generally carried at amortized cost which approximates fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

RESTRICTED ASSETS

Certain assets have been restricted in accordance with the provisions of the Trust Agreement and are classified as either current or noncurrent based on the maturities of the underlying securities.

INVENTORY

Inventory consists of E-ZPass transponders valued at cost using the first-in, first-out (FIFO) method.




23


CAPITAL ASSETS

All capital assets are stated at cost. The Authority capitalizes substantially all assets acquired with an original cost basis in excess of $10,000 for equipment and $25,000 for bridge and building improvements which have an estimated useful life in excess of one year. The cost of the Claiborne Pell Bridge includes engineering, legal, financial, administrative and other costs incident to the construction of the bridge, less income earned on certain investments during construction. All capital assets are depreciated using the straight-line method over the estimated useful lives of the respective assets as follows:

Bridges and bridge improvements 5-100 years Buildings and land improvements 8-30 years Equipment 3-20 years

INTANGIBLE ASSETS

Intangible assets, reported within capital assets, are comprised of licensing fees that do not expire unless certain contractual obligations are broken and are therefore reported at cost with no amortization.

ACCOUNTS RECEIVABLE

Accounts receivable principally consist of tolls due from away agencies, unpaid tolls and violations from open-road tolling (ORT) transactions, and gasoline tax receipts. The accounts receivable balance of $381,801 is net of allowance for uncollectible receivables related to unpaid tolls and violations from ORT and AET transactions totaling $9,705,835, which management has placed a 100% reserve against as of June 30, 2018. Management estimates that there is no allowance needed for receivables generated by away agencies and gasoline taxes as of June 30, 2018.

BOND DISCOUNTS, PREMIUMS AND ISSUANCE COSTS

Bond discounts are amortized on a straight-line basis over the life of the related bond (14-½ years and 29-½ years for the 2003 and 2010 bonds, respectively. During the year, the 2003 bond matured and the related bond discount was fully amortized. At June 30, 2018, bond discounts and accumulated amortization total related to the 2010 bond was $794,545 and $143,422, respectively.




24


BOND DISCOUNTS, PREMIUMS AND ISSUANCE COSTS (CONTINUED)

Bond premiums are amortized on a straight line basis over the life of the related bond (25 years for the 2016 Gas Tax Revenue Bond). At June 30, 2018 bond premiums and accumulated amortization total $16,333,064 and $1,584,149, respectively. Bond discounts and bond premiums, net of accumulated amortization, are presented in the accompanying financial statements as a component of bonds payable. Bond issuance costs are expensed as incurred.

REVENUE RECOGNITION – E-ZPASS The Authority uses an automated electronic toll collection system (E-ZPass) which uses transponders to identify vehicles passing through a toll plaza. Upon enrolling in E-ZPass, customers purchase transponders from the Authority. Upon initial enrollment, and subsequently when minimum dollar maintenance requirements are met, customers fund dollars on their transponders. Prepaid toll receipts are recorded by the Authority as an electronic toll liability until the customer completes a toll transaction. Upon completion of a toll transaction by a customer using a valid E-ZPass transponder, the Authority records revenue for crossing the Claiborne Pell Bridge or records a liability payable to another state for a vehicle crossing another state’s toll plaza using a transponder issued by the Authority, charges the customer’s account, and reduces the electronic toll liability. The Authority records revenue and a related receivable from another state for customers crossing the Claiborne Pell Bridge using a transponder issued by another state.

Toll charges received in cash for crossing the Claiborne Pell Bridge are recorded as revenue when collected.

REVENUE RECOGNITION-VIOLATION TOLLS AND FEES

The Authority provides Open Road Tolling (ORT) lanes which utilize both E-ZPass and automatic plate recognition technology. Customers that use ORT lanes that do not have a valid E-ZPass transponder are charged violation tolls and fees. At June 30, 2018 amounts due from violators for ORT and fees total $9,705,835 and are fully reserved at 100%. Revenue from violation tolls and fees is recognized as collected.




25


REVENUE RECOGNITION-GASOLINE TAX RECEIPTS

Beginning July 1, 2014, the State of Rhode Island enacted legislation which provides the Authority 3.5 cents of gasoline tax for every gallon sold in Rhode Island. Gas tax revenues and related receivables are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period net of estimated tax refunds. INVESTMENT INCOME

Investment income includes interest, dividends, and realized gains and losses. Additionally, investment income includes unrealized gains and losses recorded to present investments at fair value.

ACCRUED SICK AND VACATION

Employees are granted sick and vacation leave in varying amounts. Upon retirement, termination or death, certain employees are compensated for unused vacation and sick leave (subject to certain limitations) at their then current rates of pay. The amount accrued at year-end includes unused vacation and sick leave earned at the employees’ current rates of pay, subject to the applicable limitations.

NET POSITION

The Authority’s net position has been segregated into the following three components:

Net investment in capital assets – represents the net book value of all capital assets less the outstanding balances of bonds and other debt, and deferred inflows of resources, if any, used to acquire, construct or improve these assets, increased by deferred outflows of resources related to those assets, if any.

Restricted – those that have been limited to uses specified either externally by creditors, contributors, laws, or regulations of other governments or internally by enabling legislation or law.

Unrestricted – a residual category for the balance of net position.




26

NOTE 2 - CASH AND INVESTMENTS

The Trust Agreement specifies the permitted investments that may be used by the Authority. In addition, the State requires that certain uninsured deposits be collateralized. Section 35-10.1-7 of the General Laws of the State of Rhode Island, dealing with the collateralization of public deposits, requires that all time deposits with maturities of greater than 60 days and all deposits in institutions that do not meet the minimum capital requirements of its federal regulator must be collateralized.

DEPOSITS

The carrying amount of the Authority’s cash and cash equivalents, including restricted amounts, at June 30, 2018 was $22,473,320 while the bank balance was $22,583,734. Of the bank balance, $744,035 was covered by federal depository insurance and $21,834,079 was held in fully collateralized repurchase agreements. The remaining balance of $5,620 represents daily cash on hand for the customer service center. INVESTMENTS FAIR VALUE MEASUREMENTS In determining fair value, the Authority uses various valuation approaches, as appropriate in the circumstances. GASB 72 establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available (Level 1), of how the market would price the asset or liability. The fair value hierarchy is categorized into three levels based on the inputs as follows: Level 1 – Unadjusted quoted priced in active markets that are accessible at the measurement

date for identical assets or liabilities. Level 2 – Inputs other than quoted prices in active markets for identical assets and liabilities

that are observable either directly or indirectly for substantially the full term of the asset or liability.

Level 3 – Unobservable inputs for the asset or liability (supported by little or no market

activity). Level 3 inputs include management’s own assumption about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).




27

NOTE 2 - CASH AND INVESTMENTS (CONTINUED)

INVESTMENTS (CONTINUED) U.S. Government Securities (United States Treasury Bonds, US Government Agencies Bonds/Notes, US Government Mortgage Agency Mortgage Backed Securities, US Corporate Bonds and Notes): Valued at the closing price reported on the active market on which the individual securities are traded. Foreign Corporate Bonds, Municipal Bonds and Non-Agency CMOs/REMICs: Valued using quoted prices in an active market for identical assets.

At June 30, 2018, the Authority’s investments, including restricted amounts, consist of the following:

Fair Value Interest Rate Maturity

Federated Government Obligations Money Market Funds 65,766,265$ NA NAUnited States Treasury Bonds and Notes 3,537,872 .125% to 2.75% 1/15/2019 to 8/15/2046US Government Agencies Bonds/Notes 816,927 1.90 % to 3.70% 11/27/2020 to 4/12/2028US Government Mortgage Agency Mortgage backed Securities 1,808,878 2.50% to 5.0% 6/01/2026 to 10/1/2047 US Corporate Bonds and Notes 3,986,514 1.7% to 7.7% 1/15/2019 to 4/14/2027Foreign Corporate Bonds 492,985 3.1% to 5.1% 10/7/2019 to 3/8/2027Municipal Bonds 369,836 2.39% to 4.91% 7/1/2019 to 4/1/2025

Non-agency CMOs/REMICs 155,658 3.0% to 3.4% 5/12/2045 to 3/15/2048

Total 76,934,935$




28


INVESTMENTS (CONTINUED)

At June 30, 2018, the Authority’s ratings from Moody’s and the S&P 500 are disclosed below based on the fair value of investments:

Fair Value Rating % of Total

72,048,250$ Aaa 93.6%739,566 A1 1.0%586,889 A2 0.8%630,280 A3 0.8%140,608 Aa1 0.2%633,664 Aa2 0.8%405,773 Aa3 0.5%

29,471 Ba1 0.0%645,482 Baa1 0.8%618,313 Baa2 0.8%456,639 Baa3 0.7%

76,934,935$ 100%

Investments, current (restricted) 60,585,087$

Investments, non-current 16,349,848

Total Investments 76,934,935$

Interest rate risk:

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates.




29


The Authority does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The majority of the Authority’s investments have interest rates that are fixed for long periods and are subject to more variability in their fair value as a result of future changes in interest rates.

Concentration of Credit Risk

The Authority does not have an investment policy for concentration of credit risk.

Custodial Credit Risk

Custodial credit risk is the risk that in the event of financial institution failure, the Authority’s deposits and/or investments may not be returned. The Authority does not have a deposit or investment policy for custodial credit risk. At June 30, 2018 and for the year then ended, all of the Authority’s investments were direct investments not subject to custodial credit risk.




30

NOTE 3 - CAPITAL ASSETS

Balance, Retirements Balance,July 1, 2017 Additions and Disposals June 30, 2018

Capital assets not being depreciated:Construction in progress 2,376,714$ 1,092,313$ (1,989,637)$ 1,479,390$ Licensing fees 250,000 -- -- 250,000

Total capital assets not being depreciated

2,626,714 1,092,313 (1,989,637) 1,729,390

Capital assets being depreciated:Bridges * 272,126,713 20,714,384 -- 292,841,097 Buildings 8,063,621 -- -- 8,063,621 Land improvements 5,506,583 3,769,350 -- 9,275,933 Equipment 20,166,250 1,807,720 (47,927) 21,926,043

Total capital assets being depreciated 305,863,167 26,291,454 (47,927) 332,106,694

Less accumulated depreciation:Bridges * 88,121,135 11,338,481 -- 99,459,616 Buildings 4,462,349 268,251 -- 4,730,600 Land improvements 1,458,618 343,428 -- 1,802,046 Equipment 11,667,550 2,173,066 (27,454) 13,813,162

Total accumulated depreciation 105,709,652 14,123,226 (27,454) 119,805,424

Capital assets being depreciated, net 200,153,515 12,168,228 (20,473) 212,301,270

Capital assets, net 202,780,229$ 13,260,541$ (2,010,110)$ 214,030,660$

* Mount Hope and Claiborne Pell bridges




31

NOTE 4 - BONDS PAYABLE

The Series 2003A Bonds are fixed-rate bonds bearing interest at rates ranging from 1.15% to 5.23%, payable semi-annually on December 1 and June 1. The final principal payment on the 2003A bond was made on December 1, 2017. On April 8, 2010, the Authority issued $50,000,000 of Series 2010A Revenue Bonds. The proceeds of the Series 2010A Bonds were used to finance the renovation, renewal, repair, rehabilitation, retrofitting, upgrading and improvement of the Claiborne Pell Bridge, the Mount Hope Bridge and such other activities as are authorized under the Authority Act authorizing the issuance of the Bonds. The Series 2010A Bonds are fixed-rate bonds bearing interest at rates ranging from 3.5% to 5%, payable semi-annually on December 1 and June 1. Principal repayments of the bonds are due annually commencing on December 1, 2018 with a final payment due on December 1, 2039. The Series 2010A Bonds maturing on or after December 1, 2021 are subject to redemption prior to maturity at the option of the Authority. In February 2016, with the approval of the State of Rhode Island, the Authority issued 2016 Series A Motor Fuel Tax Revenue Bond in the amount of $117,590,000. The 2016 Bond was sold at a premium of $16,333,064 with total proceeds of $134,223,064 of which $60,000,000 were used to pay off a $60,000,000 Bond Anticipation Note (BAN) entered into in February 2014. The remaining proceeds were used to fund the future capital renovations and repairs. The Series 2016 Series A Motor Fuel Tax Revenue Bonds are fixed-rate bonds bearing interest at rates ranging from 3% to 5%, payable semi-annually on October 1 and April 1. Principal payments are due annually, and interest payments semiannually commencing October 2016, until maturity in 2040. During the year ended June 30, 2018, changes in bonds payable consisted of the following:

Amount

Balance, Retirements and Balance, Due WithinJuly 1, 2017 Additions Amortization June 30, 2018 One Year

Bonds payable 168,940,000$ --$ 5,920,000$ 163,020,000$ 4,225,000$

Net unamortized premium/discount 14,713,687 -- 615,895 14,097,792 --

Bonds payable 183,653,687$ --$ 6,535,895$ 177,117,792$ 4,225,000$




32

NOTE 4 - BONDS PAYABLE (CONTINUED)

The following represents debt service and sinking fund requirements to maturity as of June 30, 2018:

Fiscal year ending June 30, Principal Interest Total

2019 4,225,000$ 7,510,063$ 11,735,063$ 2020 4,385,000 7,348,600 11,733,600 2021 4,595,000 7,139,000 11,734,000 2022 4,825,000 6,911,225 11,736,225 2023 5,035,000 6,697,625 11,732,625

2024-2028 28,645,000 30,029,225 58,674,225 2029-2033 36,165,000 22,519,013 58,684,013 2034-2038 45,715,000 12,982,044 58,697,044

2039-2041 29,430,000 2,072,250 31,502,250

163,020,000$ 103,209,045$ 266,229,045$

NOTE 5 - COMMITMENTS

TOLL LANE IMPLEMENTATION AND MAINTENANCE CONTRACT

The Authority has a contract with Kapsch TrafficCom Transportation for ongoing maintenance service related to the electronic toll system E-ZPass. The three year contract commences upon final acceptance of the toll system upgrades made through June 2016 with an approximate annual cost of $163,000. Final acceptance is expected to occur in 2018.

E-ZPASS CUSTOMER SERVICE CONTRACT Early in fiscal year 2012, the Authority entered into a new service contract with CS IT America, now known as Sanef IT America (now Emovis). Sanef was engaged to design, implement, and maintain the Authority’s customer relationship database, and the Authority’s toll transactions in the travel lanes. The system (Toll CRM) processes all monetary transactions related to the Authority’s E-ZPass customer accounts, including toll and violation activity. Toll CRM also processes all toll transactions related to the Electronic Toll Collection System (ETC), sorting and processing them with the Authority’s sister E-ZPass agencies. The contract also engages Sanef (now Emovis) to provide operation and maintenance services at an annual cost of approximately $481,800. Commencing October 2016, the Authority entered into an additional contract with Sanef (now Emovis) to provide back office support to the ETC system at an annual cost of approximately $180,000. The contracts are due to expire in 2020.




33

NOTE 5 - COMMITMENTS (CONTINUED) E-ZPASS CUSTOMER SERVICE CONTRACT (CONTINUED) During 2017, the Authority entered into a contract with Duncan to provide DMV look-up services for ORT violations at an annual cost not to exceed $57,000.

CONSTRUCTION IN PROGRESS

The Authority entered into a contract in September 2016, totaling $11,662,750 for protective coating and steel rehabilitation for the Mount Hope Bridge which is expected to take over a year to complete. As of June 30, 2018, remaining commitments on these contracts total $1,507,282. During 2016, the Authority entered into contracts, totaling $8,346,945 for bridge and highway repairs for the Claiborne Pell and Jamestown Bridges which is expected to take over a year to complete. As of June 30, 2018, remaining commitments on these contracts total $2,340,458. The Authority entered into a contract in June 2018, totaling $695,150 for environmental remediation on the Claiborne Pell Bridge. As of June 30, 2018, remaining commitments on these contracts total $168,930. The Authority entered into a contract in February 2018, totaling $3,261,574 for roadway rehabilitation on RT. 138. As of June 30, 2018, remaining commitments on these contracts total $319,596. The Authority entered into contracts in March 2018, totaling $2,988,418 for cable work on the Claiborne Pell Bridge. The work is expected to commence in 2019. The Authority entered into a contract in March 2018, totaling $1,117,777 for parapet rehabilitation for the Sakonnet River Bridge which is expected to take over a year to complete. As of June 30, 2018, remaining commitments on these contracts total $993,945. COLLECTIVE BARGAINING AGREEMENT The Authority has 29 individuals employed under the terms of a contract with the United Service and Allied Workers of Rhode Island, a collective bargaining unit. The contract expires on June 30, 2020.




34

NOTE 6 - TAX DEFERRED SAVINGS INCENTIVE PLAN

The Authority sponsors an employee tax-deferred savings incentive 401(k) plan (the Rhode Island Turnpike & Bridge Authority Retirement Plan established in 1985; the Plan), which is available to employees who meet the Plan’s eligibility requirements. The investments held by the Plan, a defined contribution plan, are managed by third-party service providers and the Plan is administered by Meridien. Under the Plan, employees may contribute up to 5% of compensation and the Authority provides a matching contribution. The Authority may also make a supplemental contribution such that its total annual contribution does not exceed 10% of employee adjusted net compensation. The 10% limit includes the aggregate of the life insurance costs as well as the 401(k) contribution. The Authority contributes 3.4% of the employee’s salary to the Plan and also provides an additional match of up to 5% of the employee’s salary. The employees’ contribution to the Plan for fiscal year 2018 was $248,072, while the total cost of the matching and supplemental employer contribution for fiscal year 2018 was $229,621. The payroll for employees covered by the Plan for fiscal year 2018 was $3,074,774 and the Authority’s total payroll was $4,136,624. The trustees of the Plan are currently comprised of two members of the Authority’s Board of Directors and one employee. The trustees are responsible for establishing or amending the Plan’s provisions and contributions. The Board of Directors of the Authority must approve all amendments to the Plan.

NOTE 7 - RISK MANAGEMENT

The Authority is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; workers’ compensation claims; and natural disasters for which the Authority carries commercial insurance. Settled claims resulting from these risks have not exceeded the Authority’s coverage in any of the past three fiscal years and there have been no significant reductions in insurance coverage. Accordingly, the Authority has not recorded a reserve for such claims at June 30, 2018.

NOTE 8 - CONTINGENCIES

A contractor hired by the Authority (the Prime Contractor) submitted a pass-through claim to the Authority on behalf of a subcontractor engaged by the Prime Contractor in which the subcontractor is claiming additional compensation of approximately $8,100,000 for cleaning and painting the Newport Pell Bridge as a result of the Prime Contractor’s performance. The Authority vigorously disputes the matter and denies any liability to the Prime Contractor and the subcontractor. At this early stage, the Authority and its legal counsel have determined that it is not possible to fully evaluate the matter, including the likelihood of an unfavorable outcome.




35

NOTE 8 - CONTINGENCIES (CONTINUED) The Authority follows the guidance prescribed in accounting principles generally accepted in the United States of America and appropriately accrues for estimated liabilities when it is probable that a contingency will ultimately result in loss or expense in excess of insurance coverages. ENVIRONMENTAL REMEDIATION

The Authority has commenced work on a lead remediation program on the Claiborne Pell and the Mount Hope Bridges. Expenses relate to this project totaled $1,710,947 in 2018 with an expected completion in FY 2019. As of June 30, 2018, remaining commitments on this project totaled $168,930.


SCHEDULE OF TRAVEL AND ENTERTAINMENT EXPENSES


36

Date Paid Payee Purpose Amount

7/28/2017 Kathryn O'Connor IBTTA AET Conference Airfare 584.65$ 7/28/2017 Kathryn O'Connor IBTTA AET Conference Lodging 435.68 7/28/2017 Kathryn O'Connor IBTTA AET Conference Parking 84.00

8/1/2017 Kathryn Coleman IBTTA AET Conference Lodging 435.68 8/1/2017 Kathryn Coleman IBTTA AET Conference Meals 51.86 8/7/2017 East Ferry Deli Board of Directors Meeting Refreshments 45.25

8/28/2017 Buddy Croft IBTTA Atlanta Airfare 286.40 8/28/2017 Paul Sikorsky IBTTA Atlanta Airfare 215.40 8/28/2017 Eric Offenberg IBTTA Atlanta Airfare 240.40 9/13/2017 East Ferry Deli Board of Directors Meeting Refreshments 45.25 9/27/2017 Eric Offenberg ICSBOA Conference Airfare 283.96 9/27/2017 Joe Levesque ICSBOA Conference Airfare 283.96 9/27/2017 Buddy Croft IBTTA Conference Transportation 40.20 9/27/2017 Buddy Croft IBTTA Conference Lodging 435.52 9/27/2017 Paul Sikorsky IBTTA Conference Lodging 653.28 9/27/2017 Buddy Croft IBTTA Conference Meals 52.26 9/27/2017 Buddy Croft Providence Parking 8.00

10/11/2017 Marianne Durgin Mileage Reimbursement 35.95 10/11/2017 Joe Levesque Mileage Reimbursement 19.26 10/12/2017 Eric Offenberg ICSBOA Conference Transportation Rental 211.52 10/12/2017 Eric Offenberg IBTTA Conference Lodging 754.72 10/12/2017 Joseph J. Levesque ICSBOA Conference Parking 40.00 10/12/2017 Eric Offenberg IBTTA Conference Parking 78.00 10/12/2017 Eric Offenberg ICSBOA Conference Parking 30.00 10/12/2017 Joseph J. Levesque ISCBOA Conference Meals 47.88 10/12/2017 Eric Offenberg IBTTA Conference Meals 76.50 10/12/2017 Eric Offenberg ICSBOA Conference Meals 102.00 10/19/2017 Eric Offenberg ISCBOA Baltimore Conference Lodging 146.90 10/19/2017 Joe Levesque ISCBOA Baltimore Conference Lodging 168.37 10/25/2017 Marianne Durgin Mileage Reimbursement 23.11 11/9/2017 Buddy Croft Transportation and Parking 49.00

11/15/2017 Margaret Baker Mileage Reimbursement 51.36 11/17/2017 East Ferry Deli Board of Directors Meeting Refreshments 45.25 11/17/2017 East Ferry Deli Board of Directors Meeting Refreshments 45.25 12/8/2017 Buddy Croft Transportation 50.00

12/15/2017 Kathryn O'Connor EMC MTG - NYC Transportation 67.60 12/15/2017 Kathryn O'Connor EMC MTG - NYC Lodging 173.98 12/28/2017 Ildo Dasilva ITS Travel Insurance 23.13 12/28/2017 Eric Offenberg ITS Birmingham Airfare 370.09 12/28/2017 Joe Levesque ITS Birmingham Airfare 370.09 12/28/2017 Katherine Coleman ITS Birmingham Airfare 370.09 12/28/2017 Ildo Dasilva ITS Birmingham Airfare 370.09 1/19/2018 East Ferry Deli Board of Directors Meeting Refreshments 45.25 1/19/2018 Eric Offenberg Middletown CT Meeting Meals 18.90 1/24/2018 Buddy Croft IBTTA GOV AFF TSK MTG Conference Airfare 428.40 1/24/2018 Buddy Croft IBTTA Conference Airfare 204.80

Subtotal - page 1 of 2 8,599.24


SCHEDULE OF TRAVEL AND ENTERTAINMENT EXPENSES (CONTINUED)


37

Date Paid Payee Purpose Amount1/24/2018 Buddy Croft IBTTA Conference Airfare 122.98 1/24/2018 Buddy Croft IBTTA Conference Airfare 15.00 1/24/2018 Kathryn O'Connor IBTTA Conference Airfare 182.96 1/24/2018 Kathryn O'Connor IBTTA Conference Lodging 735.00 1/24/2018 Kathryn O'Connor IBTTA Conference Airport Parking 60.00

2/2/2018 Eric Offenberg Alabama Traf Op Tour Lodging 476.74 2/2/2018 Eric Offenberg Alabama Traf Op Tour Parking 30.00 2/2/2018 Eric Offenberg Alabama Traf Op Tour Meals 121.78 2/9/2018 Joseph J. Levesque Alabama Traf Op Tour Transportation 228.17 2/9/2018 East Ferry Deli Board of Directors Meeting Refreshments 45.25 2/9/2018 Joseph J. Levesque Alabama Traf Op Tour Parking 22.29 2/9/2018 Joseph J. Levesque Alabama Traf Op Tour Meals 5.50

2/14/2018 Kathryn Coleman Mileage Reimbursement 216.09 2/14/2018 Margaret Baker Mileage Reimbursement 28.89 2/14/2018 Jim Cooke Mileage Reimbursement 30.52 2/23/2018 Buddy Croft IBTTA Conference Transportation 33.00 2/23/2018 Buddy Croft IBTTA Conference Transportation 22.80 2/23/2018 Kathryn Coleman IBTTA Conference Airfare 162.90 2/23/2018 Kathryn O'Connor IBTTA Conference Airfare 162.90 2/23/2018 Kathryn O'Connor IBTTA Travel Insurance 24.51 2/23/2018 Kathryn Coleman IBTTA Travel Insurance 24.51 2/23/2018 Buddy Croft IBTTA Lodging 553.70 2/23/2018 Joseph J. Levesque Seminar Meals 30.29 2/23/2018 Buddy Croft IBTTA Conference Meals 122.76 2/23/2018 Joseph J. Levesque Seminar Parking 10.00 2/23/2018 Buddy Croft IBTTA Conference Parking 59.57

3/9/2018 East Ferry Deli Board of Directors Meeting Refershments 45.25 3/26/2018 American Express IBTTA Conference Airfare 342.82 4/11/2018 Kathryn Coleman Mileage Reimbursement 208.74 4/19/2018 East Ferry Deli Board of Directors Meeting Refreshments 45.25 4/19/2018 East Ferry Deli RITBA Engineering Meeting Refreshments 45.25 4/27/2018 Buddy Croft IBTTA Charlotte Airfare 381.10 4/27/2018 Kathryn O'Connor IBTTA Charlotte Lodging 389.54 4/27/2018 Kathryn O'Connor IBTTA Charlotte Parking 84.00 4/27/2018 Buddy Croft Meeting Parking 8.00

5/1/2018 Raphe Sciola IBTTA Charlotte Transportation 26.50 5/1/2018 Raphe Sciola RS IBTTA CharlotteNC 4/21-24/18 584.31 5/1/2018 Raphe Sciola IBTTA Charlotte Transportation 50.45 5/1/2018 Raphe Sciola IBTTA Charlotte NC Airport Parking 33.43 5/5/2018 Marianne Durgin Mileage Reimbursement 78.92

5/11/2018 Kathryn Coleman IBTTA Charlotte Transportation 97.09 5/11/2018 Kathryn Coleman IBTTA Charlotte NC Lodging 389.54 5/11/2018 McQuade's Marketplace Items for Board Meeting 11/7/17 7.79 5/21/2018 Kathryn O'Connor IBTTA Harrisburg Airfare 235.86

5/21/2018 Kathryn O'Connor IBTTA Airfare 485.60

5/21/2018 Cross Sound Ferry New London CT Transportation 59.00 5/21/2018 Buddy Croft IBTTA Lodging 194.77 5/21/2018 Buddy Croft IBTTA Meals 85.36 5/21/2018 Buddy Croft B.C. Poughkeepsie NY Meals 42.36 5/21/2018 Buddy Croft B.C. Parking & Taxi Charlotte Transportation 54.09 5/23/2018 Kathryn Coleman Mileage Reimbursement 173.86 6/28/2018 Eric Offenberg IBTTA Harrisburg Transportation 177.97 6/28/2018 Buddy Croft IBTTA Harrisburg Airfare 235.96 6/28/2018 Eric Offenberg IBTTA Harrisburg Airfare 275.96 6/28/2018 Frank Flowers IBTTA Harrisburg Airfare 275.96 6/28/2018 Eric Offenberg IBTTA Harrisburg Meals 138.00 6/28/2018 Eric Offenberg IBTTA Harrisburg Parking 60.00 6/30/2018 Kathryn O'Connor IBTTA Harrisburg Transporation 111.08 6/30/2018 Kathryn O'Connor IBTTA Harrisburg Airfare 154.00 6/30/2018 Kathryn O'Connor IBTTA Harrisburg Lodging 330.78 6/30/2018 Kathryn O'Connor IBTTA Harrisburg Parking 65.00

Subtotal - page 2 of 2 9,501.70 Total travel and entertainment expenses 18,100.94$


STATE OF RHODE ISLAND REQUIRED FORMAT

JUNE 30, 2018

38

Statement of Net Position

AssetsCurrent assets:

Cash and cash equivalents $ 11,929,466InvestmentsReceivables 74,598

Other assetsRestricted assets:

Cash and cash equivalents 10,543,854Investments 60,585,087Other assets 890,836Due from primary government 1,308,837

Due from primary government 380,653 Due from other governmentsInventories 35,869

Other assets 124,974

Total current assets 85,874,174

Noncurrent assets:Investments 16,349,848Receivables

(Receivables allowance)Restricted assets:

Cash and cash equivalentsInvestmentsOther assets

Capital assets - nondepreciable 1,729,390Capital assets - depreciable (net) 212,301,270Other assets, net of amortization

Total noncurrent assets 230,380,508

Total assets 316,254,682

Attachment B



JUNE 30, 2018

39

Statement of Net Position (continued)

Liabilities Current liabilities:

Cash overdraftAccounts payable $ 1,978,208Due to primary governmentDue to (from) other component unitsDue to other governmentsElectronic toll liability 5,057,353Other liabilities 5,992,264Due to primary government 307,313Current portion of long-term debt 4,225,000

Total current liabilities 17,560,138

Noncurrent liabilities:Due to other governmentsDeferred revenueNotes payableLoans payableObligations under capital leasesOther liabilitiesCompensated absencesBonds payable 172,892,792

Total noncurrent liabilities 172,892,792

Total liabilities 190,452,930

Deferred inflows of resourcesDeferred gain on advance debt refunding 0

Net positionNet investment in capital assets 52,945,077Restricted for:

Debt 70,589,736OtherOther nonexpendable

Unrestricted (deficit) 2,266,939

Total net position $ 125,801,752

Attachment B




40

Attachment C

Expenses $ 34,295,307

Program revenues:Charges for services 21,105,407Operating grants and contributions 22,500Capital grants and contributions -

Total program revenues 21,127,907

Net (expenses) revenues (13,167,400)

General revenues:Gas tax revenue 15,713,927Interest and investment earnings 756,277Miscellaneous revenue 132,475

Total general revenue 16,602,679

Special items - Extraordinary items -

Change in net position 3,435,279

Total net position - beginning 122,366,473

Total net position - ending $ 125,801,752

Statement of Activities




41

Long-Term Debt Attachment D

Principal Interest Total

4,225,000$ 7,510,063$ 11,735,063$ 4,385,000 7,348,600 11,733,600 4,595,000 7,139,000 11,734,000 4,825,000 6,911,225 11,736,225 5,035,000 6,697,625 11,732,625

28,645,000 30,029,225 58,674,225 36,165,000 22,519,013 58,684,013 45,715,000 12,982,044 58,697,044 29,430,000 2,072,250 31,502,250

163,020,000$ 103,209,045$ 266,229,045$

2039-2041

2024-20282029-20332034-2038

2021

20192020

20232022

FiscalYear

EndingJune 30,




42

Amounts AmountsBeginning Ending Due Within DueBalance Additions Reductions Balance One Year Thereafter

Bonds payable $ 168,940,000 $ - $ 5,920,000 $ 163,020,000 $ 4,225,000 $ 158,795,000Net unamortized premium/discount 14,713,687 615,895 14,097,792 14,097,792

$ 183,653,687 $ - $ 6,535,895 $ 177,117,792 $ 4,225,000 $ 172,892,792

Schedule of Changes in Long-Term Debt Attachment E

STATISTICAL SECTION


SCHEDULE OF TRAFFIC COUNT AND REVENUES


43

Claiborne

Pell Bridge

Traffic count (unaudited):Vehicle fares paid with ETC 9,423,123 Vehicle fares paid with cash 1,350,187

10,773,310

Toll revenues (unaudited):Vehicle fares paid with ETC 13,942,581$ Vehicle fares paid with cash 5,469,580

19,412,161$

44

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Board of Directors Rhode Island Turnpike and Bridge Authority We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Rhode Island Turnpike and Bridge Authority (the Authority), a component unit of the State of Rhode Island, which comprise the statement of net position as of June 30, 2018, and the related statements of revenues, expenses and changes in net position and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated September 25, 2018. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Authority’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

45

Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Providence, RI September 25, 2018

RHODE ISLAND TURNPIKE AND BRIDGE AUTHORITY (A … Reports/Audit 2018.pdfand Town of Jamestown, and...

Documents

Transcript of RHODE ISLAND TURNPIKE AND BRIDGE AUTHORITY (A … Reports/Audit 2018.pdfand Town of Jamestown, and...